Santa Maria’s spending on the targeted uses for its quarter-cent sales tax have outstripped its revenues for the last couple of years, primarily as a result of rising employee costs, according to a report from the Measure U2012 Citizens’ Oversight Committee.
But committee members said they are looking to see if sales tax revenues from the Enos Ranch development will meet projections, which could potentially reduce the deficit in the fund.
“We continued the trend of expenditures exceeding revenue,” City Manager Jason Stilwell said in summarizing the report. “But we recognize revenue from Enos Ranch has not posted yet.”
Santa Maria voters approved the addition of a quarter-cent sales tax in the June 2012 election, and the City Council established the oversight committee to monitor how much revenue is generated and how it is spent to assure it meets the intended use for the proceeds.
Most of it was designated for use in improving and supporting public safety, particularly fire and police protection.
For the 2015-16 fiscal year, Measure U expenditures exceeded revenues by $295,001, so the beginning balance of $714,007 dropped to $419,006 by the end of that fiscal year.
Of the Measure U funds spent that year, a total of 91 percent was used to support public safety, with 48 percent of that going to fire-related services and 43 percent to police-related uses.
In the 2016-17 fiscal year, the percentage of Measure U funds spent on public safety was the same at 91 percent, but that year 39 percent of that went to fire-related expenses and 52 percent supported police-related services.
Expenses outstripped revenues by $101,514 that year, so the $419,006 beginning balance dropped to $317,492 by the year’s end.
In his report, Stilwell noted the oversight committee was concerned about expenditures exceeding revenues, a situation compounded by the anticipated increase in employee pension costs.
“The committee also had a focus and discussion related to the revenue growth resulting from new development at Enos Ranch and look forward to seeing how that revenue growth matches budget projections as it begins to be received by the city,” Stilwell said in his report.
Councilwoman Etta Waterfield noted a lot of homes will be constructed as part of the Enos Ranch development that “will have a big expense to the city,” and she wondered if that might overshadow increased revenue from the project’s sales tax.
But Stilwell pointed out that Enos Ranch is a regional shopping center likely to produce sales tax revenue from people who aren’t city residents.
“We are seeing that play out as there are more shoppers here,” he said.
Councilman Mike Cordero added the city won’t see sales tax rolling in from the development for some time.
“There are a lot of happy people at the moment” because of the new shopping center, Cordero said. “But the truth is, we won’t have any numbers on that (revenue) for a year.”
Stilwell said the city is seeing some revenue from Costco, which opened at the center prior to the rest of the tenants.
“But it does take time to generate revenue and come to the city,” he said.
The spending plan approved by the council in 2012 included financing the operation of Fire Station No. 5, seven police officer positions, five new police sergeants, a new fire battalion chief, a crime analyst, a dispatcher, a senior parks services officer and a code compliance officer.
In addition, funds were to be used for part-time personnel to increase library hours from 48 to 56 and to work with the Police Activities League and the graffiti abatement program.
In 2013, the council authorized a General Fund loan to pay for safety repairs on the Santa Maria River levee, fund a new police commander and pay for the annual audit, all of which were to be charged to the Measure U fund, the report said.
Those expenditures all continued in the 2015-16 fiscal year.
But in 2014-15, the council also authorized an increase from 19 to 32 hours a week for the emergency services coordinator, the upgrade of a battalion chief to deputy fire chief and an $18,000 allocation to the library to cover increased energy costs incurred from the extended hours, according to the report.
Costs associated with the deputy fire chief’s position were shifted to the General Fund and those for a battalion chief were shifted to the Measure U fund to reduce expenses on the fund in 2015.
The following year, some Fire Department overtime costs were shifted to the General Fund so Measure U expenditures could meet available revenue, the report said.